Broward County SD, Fla., ICR Cut to Aa3 by Moody's

Moody's Investors Service has assigned a MIG 1 rating to Broward County School District, Fla.'s sale of $125 million tax anticipation notes, Series 2013, and downgraded the school district's issuer rating to Aa3 from Aa2, and the Broward County School Board's rating to A1 from Aa3 on $1.7 billion of COPs; both long-term rating outlooks were revised to stable from negative.

The notes, dated October 24, 2013, (estimated date of delivery) and due January 30, 2014, are secured by a pledge of the district's operating ad valorem taxes levied and collected in fiscal 2013-2014. Notes are additionally payable from, but not secured by, legally-available non-ad-valorem funds.

The notes will be used to finance cash flow requirements for the fiscal year that began on July 1, 2013, until property tax receipts are received.

This note issue is identical in amount to the Series 2012 notes. The Series 2013 notes represent a moderate 15.3% of the district's anticipated property tax receipts and modest 6.2% of the district's total anticipated receipts. The district has been a regular issuer of TANS and COPs and has demonstrated market access for both short-term and long-term obligations, with 10 bids received for the Series 2012 TANs, and 12 bids for the Series 2011 TANS.

The COPs are subject to annual appropriation and all district current revenues are available for repayment, although they are effectively repaid from a portion of a 1.5 mill capital outlay millage. There are no debt service reserves on outstanding COPs and there is no limit to the number of projects allowed under the master lease. Basic lease payments (including debt service) are due 15 days in advance of certificate payments.

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